This paper empirically investigates if there is a causal relation from credit expansion to housing prices, using a data set of an unbalanced panel that covers 20 developed countries from 1980 to 2019, which includes many episodes of boom and bust of housing prices. The estimates based on the local projections with instrumental variables (LP-IV) show that an exogeneous increase in credit supply leads to a boom of housing prices at short horizons, and to a bust at longer horizons. The boom lasts for two and a quarter years, turns into a bust in three years after the initial shock, and then the bust lasts for three and a half years. Our results favor the Kindleberger–Minsky view that the combination of expectation errors and the credit-supply shock leads to financial crises. We also study the cumulative effects, differential effects of current account position, and effects of a longer credit expansion.